Budget Committee Releases Working Paper on Growing Risks to the Budget and the Economy

October 18, 2016

WASHINGTON, D.C.— Today, the House Budget Committee released a working paper entitled Growing Risks to the Budget and the Economy. The working paper follows a hearing the Committee held on September 14th that examined America’s budget and economic outlook and how poor economic policies continue to contribute to the nation’s poor fiscal health.

The working paper focuses on three main areas:

An Unsustainable Fiscal Path

An Economy Mired in Slow Growth

Pro-Growth Reforms, Not More of the Same

In its opening, the paper cites a number of troubling statistics about our nation’s current and projected fiscal and economic condition – specifically:

Deficits are growing once again and are expected to double over the next 10 years, to more than $1.2 trillion.

Debt held by the public is projected to rise from roughly 76 percent of gross domestic product this year to more than 85 percent by 2026, twice the average of the past 50 years (39 percent) and the highest level since the end of World War II.

By 2046, this publicly held debt is expected to reach 141 percent of gross domestic product, surpassing the historical high of 106 percent that occurred just after World War II.

Real economic growth has averaged just more than 2.0 percent the past five years, well below the U.S. historical average of roughly 3.0 percent and marking the weakest economic recovery of the modern era.

Even though the poverty rate declined in 2015, it remained above its pre-recession level, with six million more poor people.

The paper goes on to note that the answer to the nation’s spending and borrowing problem is not to spend and borrow more:

“Instead, lawmakers should pursue pro-growth policies and strive to gain control of spending and deficits. This is the most promising combination for restoring growth, raising standards of living, and achieving a sustainable budgetary path.”

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“Since its inception more than 40 years ago, CBO has not undergone a comprehensive review. This series of hearings finally fulfilled this committee’s duty for proper oversight and broadened our understanding of CBO’s work and challenges.”

“While CBO directly assists the House and Senate Budget Committees, all lawmakers interact and engage with CBO. Proper oversight of this important congressional support agency requires a clear understanding of CBO’s relationship with all Members.”